The Hollywood Reporter, down to 50 people, is about to enter a new phase.
Variety, down well below 100 people, has already entered it.
The big changes at both of Hollywood’s historic but shrinking trade papers this month portend what will either be the final stages of those publications, or a turnaround in the drama of their ultimate survival.
No one seems to know which.
Last week, in the midst of Hollywood’s richest advertising season, Daily Variety suddenly erected a pay wall, with publisher Neil Stiles declaring that he knew asking readers to pay would mean losing traffic, but the move was necessary.
Meanwhile, the Reporter was bought by a group of hedge-fund investors at Pluribus Capital, who laid out some $70 million to buy it, Billboard, Adweek, Mediaweek and Brandweek.
But what are they going to do with the Reporter?
In an interview with TheWrap, Pluribus Capital's Matthew Doull said he was not abandoning print for the moment, although he’s a big advocate of online.
Asked about his plans for the Reporter, Doull said: “We don’t see it as an investment in print. We see it as an investment in generating news, data and analysis for a specific audience. We’re very focused on providing something that that particular business community needs.”
He said print may not be around forever: “At the end of the day, the journalist these days who doesn’t break news on a 24-hour basis isn’t going to succeed. But there’s a real place for really good analysis.”
That’s true, and for the moment that place is not the Hollywood Reporter. Nor has it been for a long time. But there you have the rationale for resurrecting the place.
And clearly many changes are afoot: Gerry Byrne, who headed the Nielsen entertainment group, will be out (or, technically, a 'consultant') starting January first. Eric Mika seems likely to follow.
Doull says that his group, which includes the publisher of The Hill, Jimmy Finkelstein, and George Green, plans to invest millions of dollars in the Reporter, presumably to hire more people, since the staff has been decimated in successive cutbacks.
Not all Nielsen titles are in the same direst straits, but none of them are thriving. And all face the same declining business model of print.
Meanwhile, Variety’s sudden decision to institute a pay wall last Thursday seems like an act of desperation. Coming smack in the middle of the season when studios place the bulk of their advertising dollars, Variety has made a conscious decision to cut off its traffic.
Why desperation? Because the ad dollars must not be there to support the newsroom.
For the first time in a decade, Hollywood’s major studios have balked at spending the millions of dollars to place For Your Consideration ads in the trades. My insiders tell me that instead of the pile of greenbacks -- up to $20 million for the Oscar season -- the trades usually amasses, this year the haul will be under $5 million.
Variety Publisher Brian Gott put it starkly: “Traffic will fall steeply.”
"The number of unique visitors to Variety.com will decline, but the people who remain on the site are our core audience,” Variety president Neil Stiles said in a statement. “These are ultimately the people we want to reach."
Yes, but for what content will they want to pay? Many of them will figure out other ways to get the same content -- including reading it here at TheWrap (and many other places, to be fair).
And while it is true that advertising in the business-to-business audience is not strictly about internet CPMs, it is nonetheless tied to traffic. If Variety’s traffic falls precipitiously, this will certainly affect the rates it will be able to charge online.
Editor emeritus Peter Bart -- who presided over the last, failed experiment to put Variety.com behind a pay wall -- has spoken to friends of the decision as one that will play out over the next few months.
He clearly does not feel certain that it will work.
But something has to, or Variety -- like the Reporter -- will be facing an endgame.